PRIVATE INVESTORS MAY BE THE ONLY ANSWER FOR NEW RACEWAY IN BAKERSFIELD BY DAVE GRAYSON The hopes of racing fans seeing a return to professional stock car racing in Bakersfield-California may now depend solely on private investors who are...
PRIVATE INVESTORS MAY BE THE ONLY ANSWER FOR NEW RACEWAY IN BAKERSFIELD BY DAVE GRAYSON
The hopes of racing fans seeing a return to professional stock car racing in Bakersfield-California may now depend solely on private investors who are willing to take the financial risk of raising the estimated $32 million needed to complete the facility known as the Kern River Raceway. The new raceway was planned to replace the former Mesa Marin Raceway in Bakersfield which was eventually sold in 2005 to a housing developer after it became obvious that Kern County officials were not going to support the renewal of the raceway's permits. The new raceway was later proposed by the Collins family, the original builder of Mesa Marin Raceway, and the Destesfani family who are a well known agri-business family in eastern Kern County.
In January of 2007 an estimated 300 gathered at the site of the proposed new raceway, at the intersection of Enos Lane and Interstate 5, to share in the jubilation of the official ground breaking for the project. The proposed development included a half mile, high banked, oval similar to the original Mesa Marin plus an integrated quarter mile track in the center of the facility. AIso included in the plans were a professional drag strip as well as an industrial complex. The project was hailed by local government officials as well as racing fans.
The cost of the new raceway was estimated to be in the range of $30 million. The original plan called for the Destesfani family to sell some agriculture zoned land and the proceeds of that real estate venture was going to pay for the construction of the new race track. However the plan got upstaged when the real estate purchaser was unable to secure the needed financing and had to withdraw the offer. All involved were the latest victims of the mortgage lending crisis that has gripped the nation over the past 18 months. The impact is reported to be especially hard here in California. Efforts to obtain financing in the more conventional manner, such as an investment firm, also failed.
Construction on the race track stopped in December of last year while the search for an alternative source of financing continued. In the early months of 2008 it was revealed that contractors working on the project had filed mechanic's liens for non payment of services. The combined total of these liens at the time was in the area of $1.3 million. However in recent days it was revealed that there are now five officially filed liens and the total is now closer to $2.2 million.
An official statement made by track President Larry Collins, and published July 24th in the "Bakersfield Californian", said "we feel terrible that they were not paid at the times services were provided but the financing simply ran out. We do appreciate them working with us and as soon as we raise all the money necessary, the first of those dollars will go towards paying off the debt to the contractors."
From the darkness of a bleak situation often comes the light of inspiration. That's when the Collins-Destesfani families started seriously looking at the concept of private investments back in June. The bold plans calls for the issuance of 32 private equity shares at $1 million each. The total of the $32 million raised will be used to pay outstanding debts, finish the construction of the track, estimated to take approximately seven months, and it will provide the needed working capital to officially lauch a new racing season in the spring of 2009.v
Larry Collins freely expresses surprise at the response to the plan and noted they were approximately two thirds of the way to achieving the financial goal. But he did caution that almost all of the money needed will have to be securely in place before they can resume operations. Beyond the concept that everyone wants stock car racing back in Bakersfield, there's seems to be one other aspect that makes this project attractive to investors. It seems that the major potential of commercial development on land adjacent to the track has become a strong point of interest.
There is also something else that this project has going for it: it's the resolve of the two families involved in the new race track. The respective families has created multiple generations of people with a very high sense of personal and professional ethics. These are the people who use intellect and hard work to achieve their goals. These are not the people who lay down before adversity.
Keep your fingers crossed that the private investment plan reaches the level of success that it needs. It will mean that we will be able to enjoy professional, NASCAR sanctioned, stock car racing in Bakersfield again as it should be.
If you happen to have an extra million collecting dust in the bank, or hidden underneath a mattress, then consider becoming an investor in the Kern River Raceway. It's very possible that this action will turn out to be an investment that rewards you with handsome dividends in a short amount of time..